Real Estate Investing is a Game of Patience
My story
A short journey to the USA in 1994 was not only a great break from work but, looking back today, has proved to be a great learning experience — with me benefiting!
While visiting relatives there, my uncle and I were discussing the concept of time-sharing investment in real estate and pre-leased properties. You get to earn monthly returns apart from a few days to stay at the property each year, while awaiting a decent capital appreciation.
On my return to Mumbai, I spoke to my family and suggested we invest in a holiday home in Pune. A couple of trips back and forth, and presto — we were the owners of a townhouse in a silent, peaceful, green zone of Koregaon Park, Pune. In those years, Pune was recommended as a go-to place for a holiday and also a retirement paradise.
We used to come and stay for a couple of days often over the years. In 1998, Pune as a city was slow compared to Mumbai, and we were used to working long hours. We got busier with work and tried to monetise our investment by renting it out. However, we were too choosy and instead thought of selling — but there was hardly any capital appreciation, so we held on.
Come 2003, Pune was changing from a Tier 3 to a Tier 2 city. In 2005, we decided to make the move from Mumbai to Pune. Our investment property became our new office space. In 2008, a bridge was constructed in the city, which added to better infrastructure, and property rates shot up — ours did too! Now we have capital appreciation on our investment as the city develops.
The question is: what if I had sold at no capital appreciation? Gratitude. Thankful, I did not.
What is the learning here?
Every bit of infrastructure adds value to the real estate built around it. I believe that for real estate investing, a developing city with less infrastructure is a great bet. You can expect super capital appreciation as urbanisation with better infrastructure takes place.
In my story, if I had decided to rent — after some due diligence — I could have monetised my asset, but I chose not to. Luckily, the infrastructure which was at a slow pace is still catching up and growing in Pune, adding to capital appreciation.
Patience definitely pays. Real estate investing is a game of patience. One needs to be lucky, apart from taking an informed decision. One requires a realtor who understands the city, its infrastructure and paperwork — a realtor who connects you with good property lawyers and bank financiers if required, and handholds you throughout the process until possession is complete peacefully.
Over the years, I have learnt a lot by visiting lawyers and understanding the paperwork needed for property dealings. In 2014 I started off as a real estate consultant, armed with all the knowledge I had acquired. I have observed every disruption since 1992, and real estate has not tanked — it does not correct, nor does it shoot up; the rates moreover remain stagnant. Even today, if you were to sell a property, you could be selling at some discount (a loss in profit) if you cannot wait. Although some properties sell almost overnight.
There are many ways to invest your capital — opportunities for big investments but also for small ones to begin with. I highly recommend fractional investing in commercial real estate, with as low as ₹25–30 lakhs, that will give a good ROI and can be held for appreciation.
With quite a vast experience, I am happy to be in this field, as I believe not in selling you a property but in assisting you in making the right buy decision. I am a catalyst, taking your intention to invest to a decision to invest. I know there are negatives in every city, but I ensure you see the positive changes happening to infrastructure development in India that make investment in Indian real estate ideal.
Are you ready to keep patience in real estate investing?
Disclaimer: The views expressed in this article are the opinion of the author and should not be construed as a promotion.